Loans

3 Months Ended

Mar. 31, 2021

The period end loan composition was as follows:


($ in Thousands)	March 31, 2021		December 31, 2020
PPP	$	836,566	$	767,757
Commercial and industrial	7,664,501		7,701,422
Commercial real estate — owner occupied	883,237		900,912
Commercial and business lending	9,384,303		9,370,091
Commercial real estate — investor	4,260,706		4,342,584
Real estate construction	1,882,299		1,840,417
Commercial real estate lending	6,143,004		6,183,001
Total commercial	15,527,307		15,553,091
Residential mortgage	7,685,218		7,878,324
Home equity	651,647		707,255
Other consumer	298,156		313,054
Total consumer	8,635,020		8,898,632
Total loans	$	24,162,328	$	24,451,724

Accrued interest receivable on loans totaled $64 million at March 31, 2021, and $66 million at December 31, 2020, and is included in interest receivable on the consolidated balance sheets. Interest accrued but not received for loans placed on nonaccrual is reversed against interest income. The amount of accrued interest reversed totaled approximately $98,000 for the three months ended March 31, 2021, and approximately $327,000 for the three months ended March 31, 2020.

The following table presents commercial and consumer loans by credit quality indicator by vintage year at March 31, 2021:


					Term Loans Amortized Cost Basis by Origination Year(a)
($ in Thousands)	Rev Loans Converted to Term(a)		Rev Loans Amortized Cost Basis		YTD 2021		2020		2019		2018		2017		Prior		Total
PPP:(b)
Risk rating:
Pass	$	—	$	—	$	281,120	$	527,971	$	—	$	—	$	—	$	—	$	809,091
Special Mention	—		—		1,642		3,434		—		—		—		—		5,076
Potential Problem	—		—		9,450		12,948		—		—		—		—		22,398

PPP	$	—	$	—	$	292,213	$	544,353	$	—	$	—	$	—	$	—	$	836,566
Commercial and industrial:
Risk rating:
Pass	$	2,009	$	2,170,406	$	378,782	$	1,303,573	$	1,333,680	$	1,119,175	$	389,390	$	694,910	$	7,389,917
Special Mention	—		7,298		96		3,805		59,502		48,156		207		185		119,249
Potential Problem	1,800		20,492		4,166		17,407		34,437		37,587		1,761		6,294		122,143
Nonaccrual	—		—		—		6,143		725		16,530		334		9,461		33,192
Commercial and industrial	$	3,809	$	2,198,196	$	383,045	$	1,330,929	$	1,428,343	$	1,221,448	$	391,692	$	710,849	$	7,664,501
Commercial real estate - owner occupied:
Risk rating:
Pass	$	11,868	$	20,916	$	59,551	$	174,514	$	210,032	$	128,471	$	81,020	$	184,983	$	859,487
Special Mention	—		—		—		5,014		2,080		—		424		260		7,777
Potential Problem	—		622		105		3,992		1,066		652		2,035		7,493		15,965
Nonaccrual	—		—		—		—		—		—		—		7		7
Commercial real estate - owner occupied	$	11,868	$	21,538	$	59,656	$	183,520	$	213,178	$	129,123	$	83,479	$	192,743	$	883,237
Commercial and business lending:
Risk rating:
Pass	$	13,877	$	2,191,322	$	719,454	$	2,006,059	$	1,543,712	$	1,247,646	$	470,410	$	879,893	$	9,058,495
Special Mention	—		7,298		1,738		12,253		61,582		48,156		631		444		132,102
Potential Problem	1,800		21,114		13,721		34,347		35,502		38,238		3,796		13,786		160,506
Nonaccrual	—		—		—		6,143		725		16,530		334		9,468		33,200
Commercial and business lending	$	15,677	$	2,219,734	$	734,913	$	2,058,802	$	1,641,521	$	1,350,571	$	475,170	$	903,592	$	9,384,303
Commercial real estate - investor:
Risk rating:
Pass	$	—	$	153,847	$	344,412	$	1,106,623	$	989,271	$	635,944	$	208,367	$	445,269	$	3,883,733
Special Mention	—		—		1,776		83,975		104,806		16,161		8,897		17,121		232,735
Potential Problem	—		802		5,473		52,576		8,952		1,787		2,840		13,321		85,752
Nonaccrual	—		—		—		8,883		15,605		19,522		14,173		302		58,485
Commercial real estate - investor	$	—	$	154,649	$	351,662	$	1,252,057	$	1,118,634	$	673,414	$	234,276	$	476,014	$	4,260,706
Real estate construction:
Risk rating:
Pass	$	5,732	$	26,865	$	125,807	$	756,890	$	628,967	$	228,127	$	21,478	$	16,815	$	1,804,950
Special Mention	—		—		—		529		3,648		58,826		42		—		63,045
Potential Problem	—		—		12		131		13,713		—		—		119		13,977
Nonaccrual	—		—		—		—		—		—		—		327		327
Real estate construction	$	5,732	$	26,865	$	125,819	$	757,550	$	646,328	$	286,953	$	21,520	$	17,262	$	1,882,299
Commercial real estate lending:
Risk rating:
Pass	$	5,732	$	180,712	$	470,219	$	1,863,513	$	1,618,239	$	864,072	$	229,845	$	462,084	$	5,688,683
Special Mention	—		—		1,776		84,504		108,453		74,987		8,939		17,121		295,780
Potential Problem	—		802		5,486		52,708		22,665		1,787		2,840		13,440		99,728
Nonaccrual	—		—		—		8,883		15,605		19,522		14,173		630		58,813
Commercial real estate lending	$	5,732	$	181,515	$	477,481	$	2,009,607	$	1,764,962	$	960,368	$	255,796	$	493,275	$	6,143,004


					Term Loans Amortized Cost Basis by Origination Year(a)
($ in Thousands)	Rev Loans Converted to Term(a)		Rev Loans Amortized Cost Basis		YTD 2021		2020		2019		2018		2017		Prior		Total
Total commercial:
Risk rating:
Pass	$	19,609	$	2,372,034	$	1,189,673	$	3,869,571	$	3,161,950	$	2,111,718	$	700,255	$	1,341,977	$	14,747,179
Special Mention	—		7,298		3,514		96,757		170,035		123,143		9,569		17,565		427,882
Potential Problem	1,800		21,916		19,207		87,055		58,167		40,026		6,636		27,227		260,234
Nonaccrual	—		—		—		15,026		16,330		36,052		14,507		10,098		92,012
Total commercial	$	21,409	$	2,401,249	$	1,212,394	$	4,068,409	$	3,406,483	$	2,310,939	$	730,967	$	1,396,867	$	15,527,307
Residential mortgage:
Risk rating:
Pass	$	—	$	—	$	449,381	$	2,205,662	$	1,280,604	$	545,743	$	881,884	$	2,257,349	$	7,620,622
Special Mention	—		—		—		121		—		37		133		525		816
Potential Problem	—		—		72		510		561		674		126		582		2,524
Nonaccrual	—		—		—		1,765		3,160		6,431		8,243		41,657		61,256
Residential mortgage	$	—	$	—	$	449,452	$	2,208,058	$	1,284,324	$	552,885	$	890,386	$	2,300,113	$	7,685,218
Home equity:
Risk rating:
Pass	$	1,891	$	526,777	$	71	$	2,080	$	11,595	$	13,535	$	10,333	$	75,385	$	639,776
Special Mention	—		25		—		—		—		60		—		265		350
Potential Problem	—		1,563		—		—		—		20		—		146		1,729
Nonaccrual	262		91		10		786		118		366		413		8,008		9,792
Home equity	$	2,153	$	528,455	$	81	$	2,866	$	11,713	$	13,981	$	10,745	$	83,805	$	651,647
Other consumer:
Risk rating:
Pass	$	171	$	156,829	$	1,908	$	8,330	$	8,674	$	2,974	$	1,351	$	117,360	$	297,427
Special Mention	—		452		—		—		40		—		—		5		497

Nonaccrual	13		93		—		15		35		10		23		56		231
Other consumer	$	183	$	157,375	$	1,908	$	8,345	$	8,749	$	2,984	$	1,374	$	117,421	$	298,156
Total consumer:
Risk rating:
Pass	$	2,062	$	683,606	$	451,360	$	2,216,072	$	1,300,872	$	562,252	$	893,567	$	2,450,094	$	8,557,824
Special Mention	—		477		—		121		40		96		133		795		1,663
Potential Problem	—		1,563		72		510		561		694		126		728		4,254
Nonaccrual	274		184		10		2,566		3,313		6,807		8,678		49,722		71,280
Total consumer	$	2,336	$	685,830	$	451,442	$	2,219,269	$	1,304,787	$	569,850	$	902,504	$	2,501,338	$	8,635,020
Total loans:
Risk rating:
Pass	$	21,671	$	3,055,640	$	1,641,033	$	6,085,644	$	4,462,823	$	2,673,970	$	1,593,822	$	3,792,071	$	23,305,003
Special Mention	—		7,775		3,514		96,877		170,076		123,240		9,703		18,360		429,545
Potential Problem	1,800		23,479		19,279		87,565		58,729		40,720		6,761		27,955		264,488
Nonaccrual	274		184		10		17,592		19,643		42,859		23,185		59,819		163,292
Total loans	$	23,745	$	3,087,079	$	1,663,836	$	6,287,678	$	4,711,270	$	2,880,788	$	1,633,471	$	3,898,205	$	24,162,328

(a) Revolving loans converted to term loans are also reported in their year of origination

(b) The Corporation’s policy is to assign risk ratings at the borrower level. PPP loans are 100% guaranteed by the SBA and therefore the Corporation considers these loans to have a risk profile similar to pass rated loans.

The following table presents commercial and consumer loans by credit quality indicator by vintage year at December 31, 2020:


					Term Loans Amortized Cost Basis by Origination Year(a)
($ in Thousands)	Rev Loans Converted to Term(a)		Rev Loans Amortized Cost Basis		2020		2019		2018		2017		2016		Prior		Total
PPP:(b)
Risk rating:
Pass	$	—	$	—	$	745,767	$	—	$	—	$	—	$	—	$	—	$	745,767
Special Mention	—		—		3,988		—		—		—		—		—		3,988
Potential Problem	—		—		18,002		—		—		—		—		—		18,002

PPP	$	—	$	—	$	767,757	$	—	$	—	$	—	$	—	$	—	$	767,757
Commercial and industrial:
Risk rating:
Pass	$	4,628	$	2,177,138	$	1,389,260	$	1,435,519	$	1,182,302	$	483,957	$	305,998	$	453,734	$	7,427,908
Special Mention	—		10,159		2,719		39,854		37,042		113		215		67		90,169
Potential Problem	2,565		7,237		19,331		28,413		56,580		2,269		6,477		1,179		121,487
Nonaccrual	16,852		—		6,238		5,789		17,014		16,623		8,781		7,414		61,859
Commercial and industrial	$	24,045	$	2,194,534	$	1,417,548	$	1,509,575	$	1,292,938	$	502,962	$	321,471	$	462,394	$	7,701,422
Commercial real estate - owner occupied:
Risk rating:
Pass	$	1,150	$	18,022	$	185,861	$	209,069	$	128,360	$	99,546	$	147,366	$	79,111	$	867,335
Special Mention	—		113		1,882		3,122		300		658		264		—		6,339
Potential Problem	—		3,486		4,104		8,916		—		1,490		4,437		3,747		26,179
Nonaccrual	—		—		—		—		—		318		—		740		1,058
Commercial real estate - owner occupied	$	1,150	$	21,621	$	191,847	$	221,107	$	128,660	$	102,012	$	152,067	$	83,598	$	900,912
Commercial and business lending:
Risk rating:
Pass	$	5,778	$	2,195,160	$	2,320,888	$	1,644,588	$	1,310,662	$	583,503	$	453,364	$	532,845	$	9,041,009
Special Mention	—		10,272		8,589		42,976		37,342		771		479		67		100,496
Potential Problem	2,565		10,723		41,437		37,329		56,580		3,759		10,915		4,926		165,668
Nonaccrual	16,852		—		6,238		5,789		17,014		16,941		8,781		8,154		62,917
Commercial and business lending	$	25,195	$	2,216,154	$	2,377,152	$	1,730,682	$	1,421,598	$	604,974	$	473,539	$	545,992	$	9,370,091
Commercial real estate - investor:
Risk rating:
Pass	$	10,971	$	171,497	$	1,249,644	$	976,332	$	720,237	$	271,987	$	341,658	$	211,360	$	3,942,714
Special Mention	—		—		90,235		97,333		12,339		—		21,882		8,465		230,254
Potential Problem	—		838		16,343		13,575		30,911		2,279		239		27,209		91,396
Nonaccrual	19,803		—		10,141		53,056		446		14,267		—		309		78,220
Commercial real estate - investor	$	30,774	$	172,335	$	1,366,364	$	1,140,297	$	763,933	$	288,533	$	363,779	$	247,343	$	4,342,584
Real estate construction:
Risk rating:
Pass	$	776	$	47,880	$	645,925	$	738,561	$	294,910	$	25,219	$	2,420	$	16,768	$	1,771,682
Special Mention	—		—		487		494		48,283		42		—		30		49,336
Potential Problem	—		—		135		—		18,803		—		93		15		19,046
Nonaccrual	—		—		—		—		—		16		—		338		353
Real estate construction	$	776	$	47,880	$	646,547	$	739,055	$	361,996	$	25,277	$	2,513	$	17,150	$	1,840,417
Commercial real estate lending:
Risk rating:
Pass	$	11,746	$	219,377	$	1,895,569	$	1,714,893	$	1,015,146	$	297,205	$	344,078	$	228,127	$	5,714,396
Special Mention	—		—		90,722		97,827		60,622		42		21,882		8,494		279,590
Potential Problem	—		838		16,479		13,575		49,714		2,279		332		27,224		110,442
Nonaccrual	19,803		—		10,141		53,056		446		14,283		—		647		78,573
Commercial real estate lending	$	31,549	$	220,215	$	2,012,911	$	1,879,352	$	1,125,929	$	313,810	$	366,292	$	264,493	$	6,183,001


					Term Loans Amortized Cost Basis by Origination Year(a)
($ in Thousands)	Rev Loans Converted to Term(a)		Rev Loans Amortized Cost Basis		2020		2019		2018		2017		2016		Prior		Total
Total commercial:
Risk rating:
Pass	$	17,524	$	2,414,537	$	4,216,457	$	3,359,482	$	2,325,808	$	880,708	$	797,441	$	760,973	$	14,755,405
Special Mention	—		10,272		99,311		140,803		97,964		813		22,361		8,562		380,086
Potential Problem	2,565		11,561		57,916		50,905		106,295		6,038		11,247		32,150		276,111
Nonaccrual	36,655		—		16,379		58,845		17,460		31,224		8,781		8,801		141,490
Total commercial	$	56,745	$	2,436,370	$	4,390,063	$	3,610,033	$	2,547,526	$	918,783	$	839,831	$	810,485	$	15,553,091
Residential mortgage:
Risk rating:
Pass	$	—	$	—	$	2,185,240	$	1,490,589	$	615,118	$	998,072	$	911,797	$	1,612,971	$	7,813,788
Special Mention	—		—		—		355		330		102		126		537		1,450
Potential Problem	—		—		1,200		689		652		—		179		1,028		3,749
Nonaccrual	—		—		1,478		2,271		5,882		7,116		11,003		31,587		59,337
Residential mortgage	$	—	$	—	$	2,187,918	$	1,493,903	$	621,983	$	1,005,290	$	923,105	$	1,646,124	$	7,878,324
Home equity:
Risk rating:
Pass	$	10,224	$	569,389	$	2,057	$	12,968	$	15,792	$	11,594	$	5,803	$	76,165	$	693,767
Special Mention	596		631		—		39		14		39		4		804		1,532
Potential Problem	—		1,922		—		—		—		—		—		146		2,068
Nonaccrual	1,600		100		965		134		410		319		711		7,249		9,888
Home equity	$	12,421	$	572,041	$	3,022	$	13,141	$	16,216	$	11,952	$	6,518	$	84,364	$	707,255
Other consumer:
Risk rating:
Pass	$	70	$	165,114	$	9,525	$	10,309	$	3,987	$	1,872	$	1,185	$	120,425	$	312,416
Special Mention	5		438		13		16		11		4		7		8		498

Nonaccrual	5		33		9		49		21		10		—		18		140
Other consumer	$	81	$	165,585	$	9,547	$	10,374	$	4,019	$	1,886	$	1,192	$	120,451	$	313,054
Total consumer:
Risk rating:
Pass	$	10,294	$	734,502	$	2,196,822	$	1,513,865	$	634,897	$	1,011,539	$	918,785	$	1,809,561	$	8,819,971
Special Mention	602		1,069		13		410		356		145		137		1,349		3,480
Potential Problem	—		1,922		1,200		689		652		—		179		1,174		5,817
Nonaccrual	1,605		133		2,452		2,454		6,313		7,445		11,714		38,854		69,364
Total consumer	$	12,501	$	737,626	$	2,200,487	$	1,517,417	$	642,218	$	1,019,128	$	930,816	$	1,850,939	$	8,898,632
Total loans:
Risk rating:
Pass (c)	$	27,819	$	3,149,039	$	6,413,278	$	4,873,347	$	2,960,705	$	1,892,247	$	1,716,226	$	2,570,534	$	23,575,376
Special Mention	602		11,341		99,324		141,213		98,320		958		22,498		9,911		383,566
Potential Problem	2,565		13,483		59,116		51,593		106,947		6,038		11,426		33,324		281,928
Nonaccrual	38,260		133		18,831		61,298		23,773		38,669		20,496		47,655		210,854
Total loans	$	69,246	$	3,173,996	$	6,590,550	$	5,127,451	$	3,189,745	$	1,937,912	$	1,770,647	$	2,661,424	$	24,451,724

(a) Revolving loans converted to term loans are also reported in their year of origination

Factors that are important to managing overall credit quality are sound loan underwriting and administration, systematic monitoring of existing loans and commitments, effective loan review on an ongoing basis, early identification of potential problems, and appropriate policies for allowance for loan losses, allowance for unfunded commitments, nonaccrual loans, and charge offs.

For commercial loans, management has determined the pass credit quality indicator to include credits exhibiting acceptable financial statements, cash flow, and leverage. If any risk exists, it is mitigated by the loan structure, collateral, monitoring, or control. For consumer loans, performing loans include credits performing in accordance with the original contractual terms.

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Special mention credits have potential weaknesses that deserve management’s attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the credit. Potential problem loans are considered inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged. These loans generally have a well-defined weakness, or weaknesses, which may jeopardize liquidation of the debt, and are characterized by the distinct possibility the Corporation will sustain some loss if the deficiencies are not corrected. Management has determined commercial loan relationships in nonaccrual status, and commercial and consumer loan relationships with their terms restructured in a TDR, meet the criteria to be individually evaluated. Commercial loans classified as special mention, potential problem, and nonaccrual are reviewed at a minimum on a quarterly basis, while pass credits, which are performing rated credits, are generally reviewed on an annual basis or more frequently if the loan renewal is less than one year or if otherwise warranted.

The following table presents loans by past due status at March 31, 2021:


	Accruing
($ in Thousands)	Current(a)		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Nonaccrual(b)(c)		Total
PPP	$	836,566	$	—	$	—	$	—	$	—	$	836,566
Commercial and industrial	7,630,593		444		82		190		33,192		7,664,501
Commercial real estate - owner occupied	883,229		—		—		—		7		883,237
Commercial and business lending	9,350,388		444		82		190		33,200		9,384,303
Commercial real estate - investor	4,196,221		5,999		—		—		58,485		4,260,706
Real estate construction	1,880,995		977		—		—		327		1,882,299
Commercial real estate lending	6,077,216		6,976		—		—		58,813		6,143,004
Total commercial	15,427,603		7,420		82		190		92,012		15,527,307
Residential mortgage	7,619,602		3,494		479		387		61,256		7,685,218
Home equity	639,503		2,002		350		—		9,792		651,647
Other consumer	295,556		681		589		1,098		231		298,156
Total consumer	8,554,661		6,177		1,417		1,485		71,280		8,635,020
Total loans	$	23,982,264	$	13,597	$	1,500	$	1,675	$	163,292	$	24,162,328

(a) Any loans deferred in connection with the COVID-19 pandemic are considered current in accordance with Section 4013 of the CARES Act.

(b) Of the total nonaccrual loans, $99 million, or 61%, were current with respect to payment at March 31, 2021.

(c) No interest income was recognized on nonaccrual loans for the three months ended March 31, 2021. In addition, there were $16 million of nonaccrual loans for which there was no related ACLL at March 31, 2021.

The following table presents loans by past due status at December 31, 2020:


	Accruing
($ in Thousands)	Current(a)		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Nonaccrual(b)(c)		Total
PPP	$	767,757	$	—	$	—	$	—	$	—	$	767,757
Commercial and industrial	7,633,269		2,819		3,300		175		61,859		7,701,422
Commercial real estate - owner occupied	899,480		158		215		—		1,058		900,912
Commercial and business lending	9,300,506		2,977		3,516		175		62,917		9,370,091
Commercial real estate - investor	4,251,571		1,024		11,769		—		78,220		4,342,584
Real estate construction	1,839,073		991		—		—		353		1,840,417
Commercial real estate lending	6,090,644		2,015		11,769		—		78,573		6,183,001
Total commercial	15,391,150		4,992		15,284		175		141,490		15,553,091
Residential mortgage	7,808,294		8,975		1,410		308		59,337		7,878,324
Home equity	692,565		3,071		1,731		—		9,888		707,255
Other consumer	310,200		1,039		560		1,115		140		313,054
Total consumer	8,811,060		13,085		3,701		1,423		69,364		8,898,632
Total loans	$	24,202,209	$	18,077	$	18,985	$	1,598	$	210,854	$	24,451,724

(a) Any loans deferred in connection with the COVID-19 pandemic are considered current in accordance with Section 4013 of the CARES Act.

(b) Of the total nonaccrual loans, $128 million, or 61%, were current with respect to payment at December 31, 2020.

(c) No interest income was recognized on nonaccrual loans for the year ended December 31, 2020. In addition, there were $28 million of nonaccrual loans for which there was no related ACLL at December 31, 2020.

Troubled Debt Restructurings

Loans are considered restructured loans if concessions have been granted to borrowers that are experiencing financial difficulty.

The following table presents nonaccrual and performing restructured loans by loan portfolio:


	March 31, 2021				December 31, 2020
($ in Thousands)	Performing Restructured Loans		Nonaccrual Restructured Loans(a)		Performing Restructured Loans		Nonaccrual Restructured Loans(a)

Commercial and industrial	$	11,985	$	2,114	$	12,713	$	6,967
Commercial real estate — owner occupied	1,488		—		1,711		—
Commercial real estate — investor	13,627		220		26,435		225
Real estate construction	256		109		260		111
Residential mortgage	10,462		13,537		7,825		11,509
Home equity	1,929		1,644		1,957		1,379
Other consumer	1,073		—		1,191		—
Total restructured loans(b)	$	40,820	$	17,624	$	52,092	$	20,190

(a) Nonaccrual restructured loans have been included within nonaccrual loans.
(b) Does not include any restructured loans related to the COVID-19 pandemic in accordance with Section 4013 of the CARES Act.

The Corporation had a recorded investment of $6 million in loans modified as TDRs during the three months ended March 31, 2021, of which $3 million were in accrual status, included in pass or special mention based on their risk rating within the credit quality tables, and $3 million were in nonaccrual, within the credit quality tables, pending a sustained period of repayment. Short-term loan modifications made in good faith to help ease the adverse effects of the COVID-19 pandemic are not categorized as TDRs in accordance with the CARES Act. The following table provides the number of loans modified in a TDR by loan portfolio, the recorded investment, and unpaid principal balance for the three months ended March 31, 2021 and 2020:


	Three Months Ended March 31, 2021					Three Months Ended March 31, 2020
($ in Thousands)	Number of Loans	Recorded Investment(a)		Unpaid Principal Balance(b)		Number of Loans	Recorded Investment(a)		Unpaid Principal Balance(b)

Commercial and industrial	—	$	—	$	—	1	$	48	$	48
Commercial real estate — owner occupied	—	—		—		1	290		321
Commercial real estate — investor	4	1,693		1,693		1	570		1,740
Real estate construction	—	—		—		1	122		122
Residential mortgage	20	3,876		3,902		18	3,592		3,668
Home equity	1	430		430		8	277		277

Total loans modified	25	$	5,999	$	6,025	30	$	4,899	$	6,175

(a) Represents post-modification outstanding recorded investment.

(b) Represents pre-modification outstanding recorded investment.

Restructured loan modifications may include payment schedule modifications, interest rate concessions, maturity date extensions, modification of note structure (A/B Note), non-reaffirmed Chapter 7 bankruptcies, principal reduction, or some combination of these concessions. During the three months ended March 31, 2021, restructured loan modifications of commercial loans primarily included maturity date extensions and payment schedule modifications. Restructured loan modifications of consumer loans primarily included maturity date extensions, interest rate concessions, non-reaffirmed Chapter 7 bankruptcies, or a combination of these concessions for the three months ended March 31, 2021.

The following table provides the number of loans modified in a TDR during the previous twelve months which subsequently defaulted during the three months ended March 31, 2021 and 2020, and the recorded investment in these restructured loans as of March 31, 2021 and 2020:


	Three Months Ended March 31, 2021			Three Months Ended March 31, 2020
($ in Thousands)	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment





Residential mortgage	1	97		3	388
Home equity	—	—		2	88

Total loans modified	1	$	97	5	$	476

All loans modified in a TDR are individually evaluated for impairment. The nature and extent of the impairment of restructured loans, including those which have experienced a subsequent payment default, are considered in the determination of an appropriate level of the ACLL.

The Corporation analyzes loans for classification as a probable TDR. This analysis includes identifying customers that are showing possible liquidity issues in the near term without reasonable access to alternative sources of capital. At March 31, 2021, the Corporation had $49 million in loans meeting this classification compared to $68 million at December 31, 2020. Of the loans classified as probable TDRs at March 31, 2021, $36 million were related to the commercial and industrial portfolio and $13 million were related to the CRE portfolio.

Allowance for Credit Losses on Loans

The ACLL is comprised of the allowance for loan losses and the allowance for unfunded commitments. The level of the ACLL represents management’s estimate of an amount appropriate to provide for expected lifetime credit losses in the loan portfolio at the balance sheet date. The expected lifetime credit losses are the product of multiplying the Corporation's estimates of probability of default, loss given default, and the individual loan level exposure at default on an undiscounted basis. A main factor in the determination of the ACLL is the economic forecast. The Corporation utilized Moody's baseline forecast, updated during March 2021, in the allowance model. The forecast is applied over a 2 year reasonable and supportable period with straight-line reversion to the historical losses over the second year of the period. The allowance for unfunded commitments is maintained at a level believed by management to be sufficient to absorb expected lifetime losses related to unfunded credit facilities (including unfunded loan commitments and letters of credit). See Note 12 for additional information on the change in the allowance for unfunded commitments.

The following table presents a summary of the changes in the ACLL by portfolio segment for the three months ended March 31, 2021:


($ in Thousands)	December 31, 2020		Charge offs		Recoveries		Net Charge offs		Provision for credit losses		March 31, 2021		ACLL / Loans
Allowance for loan losses
PPP	$	531	$	—	$	—	$	—	$	76	$	607
Commercial and industrial	142,793		(3,123)		4,490		1,367		(19,453)		124,707
Commercial real estate — owner occupied	11,274		—		4		4		508		11,786
Commercial and business lending	154,598		(3,123)		4,494		1,370		(18,869)		137,099
Commercial real estate — investor	93,435		(8,739)		2,854		(5,886)		1,694		89,243
Real estate construction	59,193		(3)		31		29		(4,979)		54,243
Commercial real estate lending	152,629		(8,742)		2,885		(5,857)		(3,286)		143,486
Total commercial	307,226		(11,865)		7,379		(4,487)		(22,155)		280,585
Residential mortgage	42,996		(243)		134		(109)		2,328		45,215
Home equity	18,849		(238)		583		344		(2,822)		16,371
Other consumer	14,630		(827)		315		(511)		(3,351)		10,767
Total consumer	76,475		(1,308)		1,031		(277)		(3,845)		72,353
Total loans	$	383,702	$	(13,174)	$	8,410	$	(4,764)	$	(26,000)	$	352,938
Allowance for unfunded commitments

Commercial and industrial	22,311		—		—		—		2,417		24,728
Commercial real estate — owner occupied	266		—		—		—		38		304
Commercial and business lending	22,577		—		—		—		2,455		25,033
Commercial real estate — investor	636		—		—		—		15		651
Real estate construction	18,887		—		—		—		422		19,309
Commercial real estate lending	19,523		—		—		—		437		19,960
Total commercial	42,101		—		—		—		2,892		44,993

Home equity	3,118		—		—		—		(199)		2,919
Other consumer	2,557		—		—		—		307		2,865
Total consumer	5,675		—		—		—		108		5,783
Total loans	$	47,776	$	—	$	—	$	—	$	3,000	$	50,776
Allowance for credit losses on loans
PPP	$	531	$	—	$	—	$	—	$	76	$	607	0.07	%
Commercial and industrial	165,105		(3,123)		4,490		1,367		(17,037)		149,435		1.95	%
Commercial real estate — owner occupied	11,539		—		4		4		547		12,090		1.37	%
Commercial and business lending	177,175		(3,123)		4,494		1,370		(16,414)		162,132		1.73	%
Commercial real estate — investor	94,071		(8,739)		2,854		(5,886)		1,709		89,894		2.11	%
Real estate construction	78,080		(3)		31		29		(4,557)		73,552		3.91	%
Commercial real estate lending	172,152		(8,742)		2,885		(5,857)		(2,849)		163,446		2.66	%
Total commercial	349,327		(11,865)		7,379		(4,487)		(19,262)		325,578		2.10	%
Residential mortgage	42,996		(243)		134		(109)		2,328		45,215		0.59	%
Home equity	21,967		(238)		583		344		(3,021)		19,290		2.96	%
Other consumer	17,187		(827)		315		(511)		(3,044)		13,631		4.57	%
Total consumer	82,150		(1,308)		1,031		(277)		(3,738)		78,136		0.90	%
Total loans	$	431,478	$	(13,174)	$	8,410	$	(4,764)	$	(23,000)	$	403,714	1.67	%

The following table presents a summary of the changes in the ACLL by portfolio segment for the year ended December 31, 2020:


($ in Thousands)	Dec. 31, 2019		Cumulative effect of ASU 2016-13 adoption (CECL)		Jan. 1, 2020		Charge offs		Recoveries		Net Charge offs		Gross up of allowance for PCD loans at acquisition		Provision recorded at acquisition		Provision for credit losses		Dec. 31, 2020		ACLL / Loans
Allowance for loan losses
PPP	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	531	$	531
Commercial and industrial	91,133		52,919		144,052		(80,320)		7,004		(73,316)		293		408		71,355		142,793
Commercial real estate — owner occupied	10,284		(1,851)		8,433		(419)		147		(272)		890		255		1,967		11,274
Commercial and business lending	101,417		51,068		152,485		(80,739)		7,151		(73,588)		1,183		663		73,853		154,598
Commercial real estate — investor	40,514		2,041		42,555		(22,920)		643		(22,277)		753		472		71,933		93,435
Real estate construction	24,915		7,467		32,382		(19)		49		31		435		492		25,854		59,193
Commercial real estate lending	65,428		9,508		74,937		(22,938)		692		(22,246)		1,188		964		97,787		152,629
Total commercial	166,846		60,576		227,422		(103,677)		7,844		(95,834)		2,371		1,627		171,641		307,226
Residential mortgage	16,960		33,215		50,175		(1,867)		500		(1,367)		651		403		(6,864)		42,996
Home equity	10,926		11,649		22,575		(1,719)		1,978		259		422		374		(4,781)		18,849
Other consumer	6,639		7,016		13,655		(4,790)		1,101		(3,689)		61		140		4,462		14,630
Total consumer	34,525		51,880		86,405		(8,376)		3,579		(4,797)		1,134		917		(7,183)		76,475
Total loans	$	201,371	$	112,457	$	313,828	$	(112,053)	$	11,422	$	(100,631)	$	3,504	$	2,543	$	164,457	$	383,702
Allowance for unfunded commitments

Commercial and industrial	12,276		(3,998)		8,278		—		—		—		—		61		13,972		22,311
Commercial real estate — owner occupied	127		—		127		—		—		—		—		4		135		266
Commercial and business lending	12,403		(3,998)		8,405		—		—		—		—		65		14,108		22,577
Commercial real estate — investor	530		246		776		—		—		—		—		2		(141)		636
Real estate construction	7,532		18,347		25,879		—		—		—		—		45		(7,038)		18,887
Commercial real estate lending	8,062		18,593		26,655		—		—		—		—		47		(7,179)		19,523
Total commercial	20,465		14,595		35,060		—		—		—		—		112		6,929		42,101

Home equity	1,038		2,591		3,629		—		—		—		—		66		(577)		3,118
Other consumer	405		1,504		1,909		—		—		—		—		—		649		2,557
Total consumer	1,443		4,095		5,538		—		—		—		—		66		72		5,675
Total loans	$	21,907	$	18,690	$	40,597	$	—	$	—	$	—	$	—	$	179	$	7,000	$	47,776
Allowance for credit losses on loans
PPP	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	531	$	531	0.07	%
Commercial and industrial	103,409		48,921		152,330		(80,320)		7,004		(73,316)		293		469		85,327		165,105		2.14	%
Commercial real estate — owner occupied	10,411		(1,851)		8,560		(419)		147		(272)		890		259		2,102		11,539		1.28	%
Commercial and business lending	113,820		47,070		160,890		(80,739)		7,151		(73,588)		1,183		728		87,961		177,175		1.89	%
Commercial real estate — investor	41,044		2,287		43,331		(22,920)		643		(22,277)		753		474		71,792		94,071		2.17	%
Real estate construction	32,447		25,814		58,261		(19)		49		31		435		537		18,816		78,080		4.24	%
Commercial real estate lending	73,490		28,101		101,591		(22,938)		692		(22,246)		1,188		1,011		90,608		172,152		2.78	%
Total commercial	187,311		75,171		262,482		(103,677)		7,844		(95,834)		2,371		1,739		178,569		349,327		2.25	%
Residential mortgage	16,960		33,215		50,175		(1,867)		500		(1,367)		651		403		(6,864)		42,996		0.55	%
Home equity	11,964		14,240		26,204		(1,719)		1,978		259		422		440		(5,358)		21,967		3.11	%
Other consumer	7,044		8,520		15,564		(4,790)		1,101		(3,689)		61		140		5,111		17,187		5.49	%
Total consumer	35,968		55,975		91,943		(8,376)		3,579		(4,797)		1,134		983		(7,112)		82,150		0.92	%
Total loans	$	223,278	$	131,147	$	354,425	$	(112,053)	$	11,422	$	(100,631)	$	3,504	$	2,722	$	171,457	$	431,478	1.76	%

Loans Acquired in Acquisitions

Loans acquired in a business combination after January 1, 2020 are recorded in accordance with ASC Topic 326. See Note 2 for more information on loans acquired in a business combination. After January 1, 2020, acquired loans were segregated into two types:

•Non-PCD loans are accounted for in accordance with ASC Topic 310-20 "Nonrefundable Fees and Other Costs" as these loans do not show evidence of credit deterioration since origination. The allowance for loan losses on these loans is recorded through provision for credit losses on the consolidated statements of income at acquisition.

•PCD loans are loans demonstrating more than insignificant credit deterioration and are accounted for with ASC Topic 326-30. Under this guidance, the credit mark on acquired assets grosses up the ACLL and the amortized cost of the loan.